Should You Defer Student Loan Payments During Your Medical Residency?

Julissa Treviño Updated on May 19, 2019

Medical school is one of the most costly educations — with the average medical student graduating with about $192,000 in debt.

While most doctors eventually go on to make desirable salaries, medical residencies are usually low-paying, according to U.S. News and World Report. That can make it hard to keep up with student loan payments.

So it's no surprise that the University of Colorado Denver reports that many interns, residents, and fellows do not choose to start to fully repay student loans during their post-medical school training.

medical doctor

Deferment and forbearance, both of which allow you to delay payments, might seem like a no-brainer during your residency. But there are a few things you should know before you take that leap.

Know the difference between deferment and forbearance

Both deferment and forbearance are options that allow you, for a specific period of time, to temporarily delay making payments on your student loans.

However, there's one big difference between the two. Under deferment, you don't have to pay interest on your subsidized loans; the interest does not accrue. However, you will still be responsible for the interest that accrues on the unsubsidized portion of the loans.

If you're a recent graduate, you probably don't have subsidized loans because they are no longer being offered for graduate studies.

Under forbearance, you're responsible for interest even though you won't be making payments. Interest accrues as normal under this plan.

Deferment time frames can range from three years onward, while forbearance is generally approved for a 12-month time period.

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You may only qualify for forbearance

Generally, you are eligible for both deferment and forbearance if you are experiencing unemployment, financial hardship, or are serving in the military.

For medical school graduates, being accepted or enrolled in full-time study in a graduate fellowship program may qualify you for a Graduate Fellowship deferment. Under this type of deferment, the government continues to pay the interest accrued on subsidized loans for the duration of the fellowship.

However, as the University of Colorado Denver notes, medical internships or residencies do not fall under this category. That means that graduates doing medical residencies who want to delay payments may only be able to apply for forbearance.

If you do not qualify for deferment, you may be able to get what’s known as a mandatory forbearance. This would apply to graduates in a medical internship or residency.

Be sure to check with your loan provider to find out what you're eligible for.

Also, don't forget that deferment and forbearance are only available if your loans are not already in default.

Think twice about delaying payments

In general, be cautious of delaying payments entirely. When interest continues to accrue and is added to your balance, your loan debt can swell quickly — which can mean that you'll be paying off your debt a lot longer.

In order to keep your loan from growing, you'll want to pay at least enough to cover the interest during your residency.

Consider other options before deciding on delaying payments, like income-based repayment plans and refinancing. These options can help you manage your debt from medical school, lower monthly payments and get out of debt faster than you would under forbearance or deferment.

Either way, choose the option that best helps you stay on top of your debt while giving you a bit of wiggle room. If you're still deciding, read more about paying off your loans

Published in: Paying Off, Student Loan Debt

About the Author
Julissa Treviño

Julissa Treviño is a writer and journalist based in Texas. Her work has appeared in BBC Future, CityLab, Columbia Journalism Review, The Dallas Morning News, Racked, Teen Vogue and other publications. She enjoys traveling, playing with makeup, biking and trying new food. Follow her @JulissaTrevino. Read more by Julissa Treviño

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